Crypto Hedge Fund BlockTower Expanding despite Market Blues

BlockTower, a crypto-oriented hedge fund founded by a Goldman Sachs alumnus, is expanding its business despite the bearish trend in the crypto market.

Crypto-oriented investment group BlockTower Capital seems unperturbed by the prolonged decline in the cryptocurrency market and is pushing ahead with its business expansion. The hedge fund, launched by former Goldman Sachs investment manager Matthew Goetz, has hired more people this year and opened a new office despite the deflating market, a person familiar with the matter told Bloomberg.

The company has grown its staff to 13, which is almost double compared to the number of employees it had at the start of 2018. Besides its head office in Stamford, Connecticut, BlockTower has also set up shop in New York.

The company’s plans defy the bearish trend that has prevailed for several months. As shown by the Eurekahedge Crypto-Currency Hedge Fund Index, crypto-related funds are down 52% year-to-date, while Bitcoin has lost 54% over the same period. However, 96 hedge funds have been launched this year compared to 156 established in 2017. The new ones might be in a better position, especially if they opened after Bitcoin’s peak.

BlockTower Capital spokesperson Jessica Schaefer confirmed to Bloomberg that the company was expanding, saying it has named Eric Friedman head of its venture strategy. Friedman previously worked for startup incubator Expa.

BlockTower has also hired Corey Miller, who worked for VC outfit Scout Ventures, and Siyu Dai, a former quantitative trader and algorithm developer at Bank of America Merrill Lynch and Nomura. Another new addition is Steve Lee, previously a trader at Goldman Sachs’ Tokyo and Singapore offices.

Since its launch, BlockTower has attracted investments from well-established venture capital groups such as Union Square Ventures and Andreessen Horowitz. Both of these have indicated interest in the cryptocurrency market. In June, Andreessen Horowitz launched a $300 million fund to invest in crypto companies. One month later, Union Square said it would invest in the crypto market although it would create a separate fund.